French Economy Stagnated In Q1, BoF Says

4/10/2012 3:21 AM ET

France's gross domestic product remained flat in the first quarter, the Bank of France reiterated in a monthly survey report on Tuesday.

In the fourth quarter of 2011, the second largest euro area economy grew 0.2 percent, after expanding 0.3 percent in the previous three months. In March, the French government raised the growth forecast for this year to 0.7 percent. In 2013, the economy is expected to expand 1.75 percent.

The bank's business confidence indicator held steady at 95 in March, unchanged from February. The sentiment indicator for the services sector also remained unchanged at 93.

Business leaders reported an improvement in industrial activity in March and the trend is expected to continue, the survey found. However, capacity utilization remained stable, below its long-term average. Order books were normal, while stocks of finished goods were slightly higher.

In the services sector, growth accelerated led by transport and engineering activities. Hiring improved and the increase in cost was modest. Stable activity is seen for coming months, the survey said.